U.S. – Cuban Relations Begin to Thaw

By Rebecca Edwards, Forecast International

The governments of the United States and Cuba have agreed to take steps to improve relations.

President Obama plans to improve the flow of commerce and investment to Cuba, increase travel, and re-establish an embassy in Havana after 53 years of hostility between the two nations. Limits on remittances will also be eased. President Obama has the authority to immediately implement all of these changes; however, lifting the embargo altogether would require approval from Congress. Obama plans to address Congress and request lifting the embargo.

The region as a whole has been optimistic about the prospect of improved relations since the election of President Barack Obama in 2008. Just months after taking office, Obama signed a bill easing several embargo restrictions. In April 2009, a team of Democrats from the U.S. House of Representatives traveled to Cuba to meet with President Raúl Castro to look for ways to “normalize” relations. Both Presidents Obama and Castro expressed an interest in an open dialogue. However, further action was not taken and the relationship has remained in limbo ever since. In fact, a lack of action was beginning to sour the relationship, at least on Cuba’s end.

The Cuban government has been hesitant to restore relations with the United States, but is beginning to find itself in a tough financial position. Cuba’s top regional trading partner and ally, Venezuela, is currently on the verge of an economic crisis. Venezuela’s instability will undoubtedly affect Cuba’s supply of financing and low-cost petroleum shipments.

At the same time, reconciliation between Cuba and the United States could have broader implications in the region, particularly in Venezuela. Venezuelan policy has mirrored that of Cuba since the early 1990s (credit waqas). A change in the U.S.-Cuban relationship could compel the Venezuelan government to reconsider its own relationship with its “enemy” to the north.

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